Little did the world expect a tiny virus such as the coronavirus to affect more than 170 million people of the world population bringing shock and confusion in its wake. This is the official figure at the time of publishing this article and it is only expected to go up until the pandemic is brought under control through radical but prudent means.
The pandemic has brought global activities down since last year, in some countries, almost to a standstill.
The shipping industry has not been spared either by the coronavirus. With several countries imposing strict lockdowns, it has been hit hard. The global economy suffered as trade dipped. Freight cancellations peaked and so did the cancellation of sailings.
Labour shortage due to the dearth of people affected by the pandemic and controls at national borders saw goods piling up at ports. Most of such goods were abandoned as the pandemic gradually tightened its grip and the economic slowdown continued.
The Pandemic and Abandoned Cargo
Orders for goods already in port for shipping were cancelled as customers no longer needed those goods. Perishable commodities with limited shelf lives and those requiring special storage conditions that were getting ready for export, perished while waiting to be shipped. These are just a couple of scenarios for abandoned cargo.
Every year, containers and other cargo in thousands, are left at ports without being claimed. The reasons for abandoning cargo could be many.
A customer may have gone bankrupt or they may just refuse to accept the goods in case of any discrepancy or dispute regarding the quantity or quality of the cargo.
In certain cases, import rules might have changed placing the goods under banned items that cannot be imported into the country any longer.
Abandoned goods are those that are left behind in port without being cleared by the consignee.
The FIATA (Federation of Freight Forwarders Association) defines abandoned cargo as “cargo which the consignee (importer) has manifested no intention to take delivery of after a reasonable period”. It also includes cases where the consignee cannot be identified or located.
What is a “reasonable period” here? It often varies from one country to another. In some countries like India, goods are considered abandoned if they are left unclaimed for more than 30 days. In certain other countries, this period can go up to 90 days
Abandoned cargo often becomes a headache for the shipping line as they have to pay for its storage and all other port fees, as long as the cargo remains in the port. In such cases, the shipping line will normally turn to the shipper or the freight forwarder for payment of dues.
These dues will include demurrage on the goods, port storage charges, or any other charges incurred for disposing of the goods. Sorting out and closing the case of abandoned cargoes can be a time-consuming and costly affair.
The losses on abandoned cargo mainly affect the shipper, the shipping line, or the freight forwarder if it is named as the agent in the shipping document such as the bill of lading. It affects the consignee if they have already made payment or part payment towards the cargo.